Value-Relevance of the Outside Corporate Governance Information: a Canadian Study

Sylvie Berthelot and Tania Morris
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Sylvie Berthelot: Département Comptabilité et Management - UdeS - Université de Sherbrooke
Tania Morris: CERAG - Centre d'études et de recherches appliquées à la gestion - UPMF - Université Pierre Mendès France - Grenoble 2 - CNRS - Centre National de la Recherche Scientifique

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Abstract: This study examines whether the corporate governance rankings published by The Globe and Mail, a reputed national Canadian newspaper, are reflected in the values that investors accord to firms. A sample of 796 observations on 289 Canadian companies from 2002-2005 inclusively was analyzed using a price model (Cazavan-Jeny and JeanJean, 2006). Results suggest that the corporate governance rankings published by this market information intermediary are related not only to firm value, but also to accounting results. Thus, the relationship between corporate governance scores and market capitalization can take two forms. First, there may be a direct relationship due to investor interest in good governance practices. Second, there may be an indirect relationship due to the impact of good governance practices on the firms' accounting results. The results of this study should be useful for accounting practitioners and the various organizations involved in the regulation of corporate governance practices and the standardization of relevant data elements.

Keywords: Corporate governance; Financial market; Corporate governance rankings; Information intermediary; Investors; Research paper (search for similar items in EconPapers)
Date: 2008-05
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00522378v1
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Published in LA COMPTABILITE, LE CONTRÔLE ET L'AUDIT ENTRE CHANGEMENT ET STABILITE, May 2008, France. pp.CD Rom

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00522378

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